CONTRIBUTORS

Democrats refuse to cut spending, double down on tax hikes

This isn’t your father’s Democratic Party. Liberal politicians in Augusta these days simply refuse to cut spending by one penny while they double down on tax hikes that hit everyday Mainers and small businesses hard to pay for more welfare spending.

As part of the last state budget, the Legislature was required to find $34 million in spending cuts recommended by the Office of Policy and Management and convene a committee to find an extra $40 million in tax revenue by cutting “corporate loopholes.” This approximately $74 million in cuts and tax hikes was required to balance the budget.

What actually happened next should come as no surprise to those who have been watching the actions of liberal Democratic politicians over the last few decades.

They flat-out rejected the spending reductions proposed by OPM — spending reductions that they themselves asked the team of budget experts to find. And then they found so many tax hikes they liked that they just recommended all of them, proposing some $80 million in tax increases to be enacted by the Legislature when it meets in January.

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The special tax hike committee, dubbed the “Tax Expenditure Review Task Force,” was stacked mainly with liberal establishment regulars. They failed to find any meaningful “corporate loopholes” in the state tax code, so they recommended a slew of regressive tax-raising proposals.

Among the recommendations the liberal panel came up with were $22.6 million in new taxes on amusements such as movie theater and ski lift tickets, $22 million on services like haircuts and gym memberships, and even a $4.4 million tax on cable and satellite television services. They also recommended raiding $4 million from the tax relief fund, which is there to help lower the income tax over time.

On top of these new taxes on Maine’s middle class, they threw in job-killing proposals like rolling back tax incentives for Pine Tree Zones and research and development efforts, and slapping new taxes on small business inventories and vending machines. The panel even called for a new cap on the Opportunity Maine tax credit, which helps young graduates of Maine universities pay back their student loans.

With all these new tax proposals, one wonders what was so bad about the OPM’s spending cut plan that made Democrats want to propose $80 million in new taxes on Mainers, who already endure the nation’s sixth-highest tax burden.

Turns out the spending cut proposals were good ideas and just a tip of the iceberg for all the waste that goes on in state government. For example, Maine spends about 2.5 times per student more than the average state on administrative costs in public schools, so one idea was to reduce administrative budgets while preserving classroom resources.

Another spending idea rejected by Democrats was to limit General Assistance, putting a much-needed check on welfare spending, which has doubled in Maine over the past 20 years without a change in the poverty rate. Maine now ranks second in the nation for welfare spending as a share of overall state spending. In fact, if we simply reduced our welfare spending to New Hampshire levels, we could nearly eliminate the income tax entirely.

Welfare and education spending combine to equal 80 percent of the state budget, so eliminating administrative waste in schools and incentives for abuse at DHHS are essential. But these are just two of a broad range of spending cuts that recommended eliminating inactive boards and commissions, discontinuing overly-bureaucratic and outdated licensing programs, and much more.

It seems that no matter how sensible and limited the spending cuts are, however, Democrats always say “no.” They never bring any ideas to the table for reducing spending but they always bring more tax-raising ideas than they can even fit on the table.

Most Mainers believe our state’s decades-old budget problems are caused by too much spending, not too-low taxes. Surveys collected in moderate state House districts this fall show that 60-80 percent of Mainers believe that to be the case.

It’s time to put state government on a diet and curb wasteful spending to avoid even more tax hikes and ensure adequate funding for essential services outside of the welfare-bureaucratic complex that is swallowing Maine’s budget whole. It’s time for Democrats to acknowledge that spending reductions must be part of the effort to balance Maine’s budget.

Rep. Jeffery Gifford, R-Lincoln, a retired union mill worker, was instrumental in the effort to repeal the 2009 tax package.